Gratuity is a valuable property right, not a government bounty. Any unjustified delay in payment entitles an employee or their heirs to interest as a penalty for the delay, especially when the employer fails to establish valid legal grounds for withholding the funds during prior litigation.

JUDGMENT :

KARUNESH SINGH PAWAR, J.

1. Heard Sri Sheikh Wali Uz Zaman, learned counsel for the petitioners, and Sri Amarnath Singh, learned Standing Counsel appearing for the State-respondents.

2. By means of the present writ petition, the petitioners have prayed for issuance of a writ in the nature of Certiorari quashing the impugned order dated 01.01.2026, annexed as Annexure No.1 to the writ petition, whereby the claim of the petitioners for payment of interest on delayed payment of gratuity has been rejected. A further prayer has been made for issuance of a writ in the nature of Mandamus commanding the respondents to sanction and pay interest on the delayed payment of gratuity with effect from 31.07.2005 till 30.07.2024, at the rate of 18% per annum, within a stipulated period as may be fixed by this Court.

3. The brief facts of the case, as borne out from the pleadings on record, are that the petitioners are the legal heirs and children of Late Dr. Anwarullah Khan, who was appointed as a Medical Officer in the Provincial Medical Services (hereinafter referred to as “P.M.S.”) on 22.06.1970. After rendering more than 35 years of unblemished service, Late Dr. Anwarullah Khan attained the age of superannuation and retired from service on 31.07.2005.

4. Since the retiral dues, particularly gratuity, were not released despite retirement, Late Dr. Anwarullah Khan instituted Writ Petition No. 1061 of 2014, Dr. Anwarullah Khan Vs. State of U.P. and Others , which came to be disposed of vide judgment and order dated 17.07.2017. By the said order, this Court directed the respondents that in case there existed no legal or other impediment, the gratuity amount shall be paid within two months from the date of production of the certified copy of the order; otherwise, a reasoned order was required to be passed indicating specific reasons for withholding gratuity.

5. The aforesaid order was not complied with by the respondents. In the meantime, Late Dr. Anwarullah Khan died on 03.12.2014 and thereafter his wife also died on 11.06.2022. Consequently, the petitioners instituted Contempt Petition (Civil) No.2901 of 2018 seeking compliance of the order dated 17.07.2017.

6. During pendency of the contempt proceedings, a compliance affidavit was filed on behalf of the respondents stating therein that gratuity had been withheld on account of alleged outstanding house rent dues amounting to Rs.18,50,975/-. The Contempt Court, however, vide order dated 29.05.2024 rejected the compliance affidavit and directed filing of a fresh affidavit.

7. Subsequently, while considering the matter on 16.07.2024, the Contempt Court recorded an observation that admittedly no proceedings had ever been initiated against the deceased employee during his lifetime regarding alleged unauthorized occupation or recovery of house rent. Thereafter, in compliance of the order passed by the Writ Court, gratuity amounting to Rs.3,50,000/- was sanctioned vide order dated 24.07.2024 passed by the Chief Medical Officer, Rampur and the said amount was credited into the accounts of the petitioners on 30.07.2024. Consequently, the contempt petition came to be dismissed on 31.07.2024 after recording compliance.

8. Considering paragraph no. 31 and 32 of the judgement passed in S.D. Bandi Vs. Divisional Traffic Officer, KSRTC & Ors. AIR 2013 SC 2507, the petitioners were paid gratuity of the deceased employee on 30.07.2024.

9. Learned counsel